Senior Counsel Harpreet Singh Nehal says it is difficult to appreciate the decision by the Corrupt Practices Investigation Bureau (CPIB) of not prosecuting six former senior management staff of Keppel Offshore & Marine Ltd  (KOM), given how the company has openly admitted its involvement in the bribery and paid a massive US$422 million fine, on top of the large amount of evidence available of the bribery scheme.

This was said in a commentary by Mr Singh, published in Singapore Law Watch on Wednesday (1 Feb) in response to CPIB’s announcement that, in consultation with the Attorney-General’s Chambers (AGC), it would not be prosecuting six former senior management staff of KOM for their involvement in US$55 million in bribes paid to Brazilian state officials to secure thirteen large contracts there. Instead, they would be given “stern warnings”.

Mr Singh questioned if this signals a crack in Singapore’s long-professed policy of zero tolerance towards corruption.

“Should Singaporeans be concerned by the decision? The answer depends on what one makes of the CPIB’s justification for its decision and whether any further information is given. In the absence of compelling further information from the authorities, the decision is discomforting.”

The Bribery Scheme

For years (between 2001 and 2014), KOM and others conspired and paid huge bribes to officials of Brazilian state-owned oil company, Petrobras to influence them and certain Brazilian politicians to secure thirteen projects in Brazil.

KOM channelled these bribes through a consultant. To conceal these illegal payments, KOM group executives created and signed consulting agreements with shell companies controlled by the consultant.

Through this scheme, KOM and its related companies earned profits of over US$350 million from businesses corruptly obtained in Brazil.

KOM admitted these facts in a lengthy agreed statement of facts that it signed with the US Department of Justice (DoJ) in 2017 as part of a deferred prosecution agreement.

That statement details KOM’s involvement in the bribery scheme, including emails exchanged between KOM group executives and the consultant. As part of a global resolution involving the DoJ and authorities in Brazil and Singapore, KOM paid US$422 million in fines.

The six former executives from KOM were arrested by CPIB in Feb 2018 following the DoJ’s investigation. The six were subsequently let off on bail, and the matter was then referred to the AGC to decide if charges were to be filed.

In a press release on 12 January, CPIB explains its decision not to prosecute any of the six is explained in a few short paragraphs.

“This case is complex and transnational, involving multiple authorities and witnesses from several countries. There are evidential difficulties in cases of such nature. Many of the documents are located in different jurisdictions. In addition, key witnesses are located outside of Singapore and cannot be compelled to give evidence here.

The decision whether to prosecute the six individuals for criminal offences has to take into consideration all relevant factors, such as the culpability of each individual, the available evidence and what is appropriate in the circumstances.

Having taken these into consideration, stern warnings were issued to the six individuals.”

“Difficult to appreciate CPIB’s decision” 

In his commentary, Mr Singh laid out a series of points that questions CPIB’s decision not to prosecute the six former executives and whether it was justified:

1. The fact that a corrupt scheme is complex and transnational cannot on its own justify non-prosecution.

2. There is already a very large amount of evidence of the bribery scheme available with KOM, which is fully accessible to prosecutors.

This is clear from the admissions in KOM’s agreed statement of facts with the DoJ. This evidence included the identities of the consultant, the KOM group executives and the Brazilian officials involved.

3. CPIB also has extensive investigative powers over the six former KOM senior management staff, who all appear to be within the jurisdiction. The CPIB has been investigating the six individuals for several years now.

There is every likelihood that given its resources, vast investigative experience, and the massive amount of evidence already available, the CPIB would probably have secured admissions from one or more of the six individuals through their investigations.

4. Advanced digital forensic tools are also available to access KOM’s servers and the six individuals’ personal mobile devices to identify and collect yet further relevant evidence. KOM’s DoJ statement shows that a fair amount of communication on the matter took place via email.

Likely, even more, communications occurred via chats on the individuals’ personal mobile devices. Such electronic evidence is very likely already in the CPIB’s possession, whether obtained initially through KOM’s “thorough internal investigation” or via the CPIB’s own subsequent investigations. If more extensive electronic searches need to be made, the CPIB has the technical resources and legal powers to do so.

5. Even assuming some evidence required to secure a conviction is located overseas, Singapore authorities have recourse to international assistance from their foreign counterparts.

Under the Mutual Assistance in Criminal Matters Act 2000 (2020 Rev Ed), the Attorney-General may request foreign government assistance to arrange for relevant overseas evidence to be collected and sent to Singapore.

“It is, therefore, difficult to appreciate the decision not to prosecute based on the CPIB’s limited explanation,” wrote Mr Singh.

He further added that KOM itself has openly admitted its involvement in the bribery and paid a massive US$422 million fine, noting that this is one of the largest bribery scandals in Singapore’s history, where the corrupt acts involved the wholly owned subsidiary of a Singapore public listed company; senior management of KOM were implicated; the pattern of criminal conduct extended over a decade; and huge sums in bribes were involved.

Questions That Must Be Asked

Mr Singh also raised several questions which he said would help to determine whether CPIB’s decision is justified:

(a) With such extensive evidence already available, what exactly is the missing evidence against the six individuals, if any, without which an effective prosecution cannot be mounted?

(b) Have none of the six individuals made any admission(s) or given helpful evidence to the CPIB in respect of that missing evidence?

(c) Is that evidence not available as part of the “voluminous evidence and information” that KOM uncovered as part of its “thorough internal investigation” or through the CPIB’s own investigations, including using digital forensics tools?

(d) Who are the so-called “key witnesses” who are located overseas? Even if they are not named, what was their role in the bribery, and is their evidence so crucial that a conviction cannot be secured without their testimony?

(e) To the extent that “many of the documents are located in different jurisdictions”, are they not part of the “foreign documents” that KOM obtained and forwarded to the DoJ? At any rate, how important are these foreign documents to secure a conviction, and why?

(f) If the foreign evidence is indeed crucial, has assistance been sought from foreign authorities? If so, has such assistance been refused?

(g) Is the evidence, in this case, such that not even a single individual was sufficiently blameworthy to warrant a prosecution?

“Incorruptibility is a foundational value for Singapore”

Noting that failure to prosecute cases like the present without strong justification, when the facts appear glaring, is highly damaging, Mr Singh voices his concern about how this leads to unhelpful speculation that there is some other factor at play.

“While the Attorney-General is not ordinarily required to explain his prosecutorial decisions, given the stakes involved here, it will be highly desirable that he does so in this case, ” wrote Mr Singh.

“The CPIB statement shows the authorities have already considered that their nonprosecution decision warrants an explanation, albeit the statement given so far raises more questions than it answers.”

“It is in the national interest that a full justification, with sufficient detail on the questions posed, is given for the decision not to prosecute in this case. Broad, general responses of the type in the CPIB press release are wholly inadequate.”

“If our national policy of zero tolerance for corruption is to have any meaning, it must involve the robust enforcement of our anti-corruption laws, whether the corruption takes place in Singapore or overseas.”

“That enforcement must extend not just to those who actively participate in giving a bribe, but also to all senior executives and board members (including those at the ultimate parent of group companies) who are aware of and who either condone the illicit payments or turn a blind eye towards them.”

“When it comes to our national commitment to incorruptibility and the rule of law, we will be judged not just by what we say, but equally by what we do.”

PM Lee’s spouse, Ho Ching was CEO of Temasek Holdings

Back in 2012, Singapore Prime Minister Lee Hsien Loong swore to punish corrupt officials, no matter how senior they were.

“Anyone who breaks the rules will be caught and punished. No cover-up will be allowed, no matter how senior the officer or how embarrassing it may be,” PM Lee told CPIB officers during the agency’s 60th Anniversary on 18 September 2012.

The CPIB directly reports to PM Lee.

Given that PM Lee’s spouse, Ho Ching, was formerly CEO of Temasek, which is a significant shareholder of Keppel Corporation, the parent company of KOM, when the offences were committed. This makes CPIB’s decision not to prosecute the six Keppel executives kind of awkward.

To make things even worse on the matter of public perception, the Attorney-General who decides on whether to proceed on charges for offences committed is Mr Lucien Wong, PM Lee’s former lawyer who had assisted him in the Oxley Road dispute with his siblings.

No statement has been made by PM Lee or the ministers regarding the public dissatisfaction over CPIB’s questionable decision at the time of this post’s publication.

Members of Parliament from the Workers’ Party have filed several questions in regard to the non-prosecution of the six former executives, which will hopefully be answered in the upcoming Parliamentary sitting for February.

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